John Locke and S&S show us another kind of deal we can expect to see again

OK, now we know another new paradigm for book publishing in the digital age with the announcement of self-publishing author John Locke’s new deal for print distribution with Simon & Schuster.

The big publishers have said for a while now that they won’t be signing up books for print rights only. That makes sense, up to a point.

It is logical that with print declining and digital sales rising, publishers don’t want to be investing in an author only to control the getting-smaller part of the sales. We’re in this moment when print sales are still vitally important but less so every day. Ebooks don’t require the same organizational scale as distributed print, so authors legitimately feel that they can get the substantial part of that sale without giving up the 75% of the ebook royalties big publishers demand as the price to gain access to the print distribution capability that makes real use of big publisher scale.

But there are limits to the publishers’ logic to walk away from print-only deals. Publishers also have the challenge of feeding the big organization they’ve built to deliver print to its shrinking marketplace. It is hard to ignore sales volume you need to support expensive operations.

The first crack in the wall of “we don’t do print-only” was Houghton Harcourt’s deal with Amazon to publish the print edition of some titles originated by Amazon imprints. Houghton made the point that although it might look like what they were doing was a print-only deal, it really broke no precedents. They pointed out, accurately, that when a publisher acquires paperback rights to a book another house did in hardcover (the most common sort of licensing deal 30 or 40 years ago but not so common now), the ebook rights would stay with the originating publisher. That, they said, was all that was happening in this case.

As a fan of Locke’s Donovan Creed books (I just finished reading another one yesterday!), I had already done some analysis and written that I thought he was leaving a lot of money on the table working exclusively on the ebook side. (I ignored a deal he had with “Telemachus Press” to do print of his books because I figured they’d hardly sell any; the deal announced today would tend to confirm that assumption.)

Although the details of the Locke deal with Simon & Schuster haven’t been revealed, it is characterized as a distribution deal. Strictly speaking, that would make Locke himself the publisher and the party responsible for the cost of inventory. S&S would warehouse that inventory and handle all the mechanics of distribution, including billing and collecting. Then they would remit the larger portion — probably more than 70% and less than 80% — of the revenue they receive to Locke.

How profitable Locke’s print sales will be for him depend on his costs for print (which are in turn a function of how well he and Simon & Schuster match what is printed and distributed to the demand for his books), the retail price he sets, and, of course, the numbers he can sell.

There is another way Locke will profit. The increased awareness of his books that he’ll gain by having them in stores should generate more ebook sales and he presumably doesn’t share those with his print distributor.

There have been a number of signs this year that the publishing world is changing dramatically.

In March we had Barry Eisler, who had sold many books through conventional deals with major publishers, decline a six-figure deal with a major house. At first, Eisler was going to self-publish, but then he decided to take a (presumably) six-figure deal to be published by Amazon instead.

Amanda Hocking, who had started (like Locke) as a startlingly successful self-publishing author, accepted a deal with a major house to continue her career, pretty much the opposite of Eisler’s originally-intended path (although closer to what he actually did in the end).

Then J.K. Rowling, the author of the Harry Potter series, announced she was creating her own online destination, Pottermore, to deliver ebooks. Rowling is apparently not just disintermediating her publisher from her ebook sales; she’s leaving out many of the online retail channels as well.

And now we have Locke entirely self-publishing, but working through a major house to get his printed material into the supply chain.

When we discussed Eisler’s original decision, we talked about the fact that self-publishing left the substantial revenues from print untapped. The Hocking and Ferriss deals are similar, even though hers is with a traditional publisher and his is with Amazon. They are both pursuing what they think will be the most lucrative alternative for them, choosing from among options by which they get paid and somebody else does all the non-writing parts of the work.

Rowling’s initiative and Locke’s are both real self-publishing plays. I am skeptical that Pottermore is worth tracking as a commercial example by any but a small handful of wildly successful authors. It’s an anomaly in many ways. Harry Potter to publishing in the past decade is like the Beatles to music in the 1960s; nothing else comes close to its level of commercial success. What Rowling is doing might work just fine (although I have my doubts that it will reach more readers than if she used more conventional means, she might make more money and she might build a platform for other opportunities), but that doesn’t mean it would work for anybody else.

Locke might be an outlier as well. Nobody else except perhaps Hocking has achieved his level of self-publishing success. And, unlike Hocking, who is a writer who just wants to be a writer and is delighted to have a publisher take over her business responsibilities, Locke is an experienced businessperson who seems to prefer managing his own commercial affairs.

In the Locke deal, though, we can see the outlines of future arrangements by which publishers can reconfigure their dealmaking to adjust to changing times. It isn’t just agents who are changing their business models or offering new services to accommodate the reality of self-publishing fostered by the growing ebook market share (and Locke’s agent, Jane Dystel, is one that has announced that her office is doing just that), publishers will adjust as well.

The model of “self-publishing through a major house ” can be a workable one for all sides if it is restricted to authors whose commercial appeal has already been established. Since all the major houses have distribution deal models, it might not be long before there’s a person at each one assigned to making sure that authors and agents are as well taken care of as “clients” as they were in the past working through their editors.

These deals will morph. For example, does Locke really have to pay the printer, or will S&S cover him on that and just take the costs out of proceeds? If S&S were doing a deal like this for books that hadn’t already been published digitally, would they be able to extract a modest share of ebook sales as compensation for doing the ebook setup? And deals like this could evolve to also include some other costs — like copy-editing or cover creation — being fronted by the publisher, or I guess I should say “the distributor”.